Feds threaten to revoke $7 million from DeKalb | ajc.com

Feds threaten to revoke $7 million from DeKalb ajc.com

Politics could be to blame for DeKalb County losing a $7.8 million federal stimulus grant and possibly millions more if the county doesn’t move forward with a proposal to turn landfill gas into alternative fuel.
The plan involves using a federal Department of Energy grant to capture methane gas at the county’s Seminole Landfill in Ellenwood and converting it into automotive-grade compressed natural gas, which would be used to power the county’s 40 garbage trucks.
County officials signed a contract last year with Clean Cities Atlanta to help with the plant, but now some DeKalb officials have begun to back off from the agreement after a private company submitted an alternative proposal.
On Monday, the DOE sent a letter to the county, threatening to revoke the grant and future stimulus money if the county commission doesn’t approve the project by the end of Tuesday. The commission is scheduled to vote on the issue Tuesday.
“Certainly when you don’t perform a project well or at all, you’re certainly at risk of not getting future projects,” said Stephen Clermont, director of the DOE's Center for Transportation and the Environment. “This could be a black eye for DeKalb County in terms of getting stimulus money and other grants.”
The county could also possibly face litigation if it doesn’t move forward, Commissioner Jeff Rader said.
“We would be in default. There already is a legally binding contract between DeKalb County and the Department of Energy,” Rader said. “We can’t just change our mind.”
Last year, the DOE awarded the region a $14.9 million stimulus grant to help make the metro area less dependent on foreign oil.
The largest project in the group included $7.8 million for DeKalb to build the CNG plant at its landfill, along with a CNG public fueling station at Memorial Drive and Kensington Road. DeKalb would convert all of its garbage trucks from diesel to CNG and sell the remainder of its CNG to other fleets.
The county would end up spending about $1 a gallon for CNG, rather than $3-plus a gallon for diesel fuel.
“The county has about 50 years of natural gas that it can mine from this landfill alone,” said Don Francis, executive director of Clean Cities Atlanta, a non-profit that works with the federal government to find petroleum alternatives. “Not only is it cheaper and improves air quality, but we would be reducing the dependency on foreign oil. We will be using natural gas that is made right here in DeKalb County."
The remainder of the grant money has already gone to the City of Atlanta to convert airport shuttles into CNG vehicles, to UPS to convert 50 trucks and to Coca-Cola to buy hybrid trucks.
“Everything has to be built and up and running by March 2012 and it will take a year to build. We’re running out of time,” Clermont said. “Really, this is a win-win and there is no reason the county should be stalling.”
However, Commissioner Lee May said he doesn’t know if the financial benefit is that simple. DeKalb will have to eventually raise sanitation rates to pay for retrofitting those garbage trucks and operating the CNG facility at the landfill, May said.
“Right now, there is no proposal to raise rates, but there will have to be. Over the years, we’re going to have to spend $21 million of our money to maintain that plant,” May said.
With the county facing an estimated $28 million shortfall in this year’s budget along with increased water rates, May isn’t sure if CNG is the best solution.
Rader said the county could avoid raising trash rates by cutting the number of residential pickups from four to once a week.
May and county officials are now looking a public-private venture, where DeKalb would sell all of its natural gas to Jacoby Energy Development. Jacoby, which already runs a private energy facility at DeKalb’s Live Oak landfill, submitted an alternative proposal late last year. This proposal, which is not eligible for the federal stimulus money, would involve paying DeKalb a “royalty” to use its trash.
"We would use our existing infrastructure so there would be no outside costs to the county," said John Borden, Jacoby's general counsel. "We were invited to submit a bid and the county was intrigued. We didn't mean to create controversy."
If th DOE project moves forward, DeKalb would be the first government in the metro area to convert trash into clean gas, officials said.
“This was to be an example for the region,” Francis said. “What I have been told by the Department of Energy is if DeKalb pulls the plug and goes with Jacoby, I have to find a similar project somewhere else in the country. This will hurt us and be a black mark for DeKalb for a long time.”
Currently, the region has only one CNG station, located off Riverdale Road in Clayton County. Under the grant, a total of six more will be built, including the two in DeKalb. The rest will be operated by private companies.